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Natural Gas Inventories Are below the 5-Year Average

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EIA’s natural gas inventories  

The EIA (U.S. Energy Information Administration) released its weekly natural gas inventory report on January 20, 2017. It reported that US natural gas inventories fell by 243 Bcf (billion cubic feet) to 2,917 Bcf from January 6–13, 2017.

US natural gas inventories hit 4,047 Bcf for the week ending November 11, 2016—the highest level ever. Changes in inventories impact natural gas (FCG) (BOIL) (DGAZ) (GASL) prices. For more on natural gas prices and the weather, read Part 1 and Part 2 of this series.

A Wall Street Journal survey estimated that US natural gas inventories would have fallen by 229 Bcf from January 6–13, 2017. Natural gas (FCG) (BOIL) (UNG) (GASL) prices rose on January 20, 2017, due to the larger-than-expected decline in inventories. For more on prices, read Part 1 of this series.

The five-year average natural gas withdrawal for this period is 170 Bcf. Natural gas inventories fell by 178 Bcf during the same period in 2016. They fell by 151 Bcf in the week ending January 6, 2017.

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What’s the impact?  

For the week ending January 13, 2017, US natural gas inventories were 2.6% lower than the five-year average. They’re also 13% less than the same period in 2016. Falling US natural gas inventories and the cold winter could support natural gas (FCG) (UNG) (GASL) prices. High natural gas (BOIL) (UNG) prices would have a positive impact on oil and gas producers’ profitability such as Southwestern Energy (SWN), Newfield Exploration (NFX), Cimarex Energy (XEC), and Memorial Resource Development (MRD).

Next, we’ll take a look at US natural gas inventories by region. We’ll also look at the US natural gas inventory forecast for March 2017.

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